Values are redefining the client experience.

How well do you really know your clients?

In the wake of a global pandemic and a growing movement towards social and economic equity, many clients are reevaluating what’s important to them and what they want to achieve with their wealth. In the second e-book in our three-part series, we cover how to leverage a values-driven approach to more effectively attract and serve today’s clients and the next generation of investors. 
 

Three trends are redefining the client experience

1. Values-driven investors focus on more than financial performance. 

The last few years have seen growing alignment between individuals’ behaviors as consumers and investors, with a strong focus on supporting businesses and organizations that share their personal values.

• Morgan Stanley’s biennial sustainability survey found that more consumers are not only making buying decisions based on sustainability, but also screening their investments according to their values.¹
• Accenture's study of wealth management clients shows that personalization matters: 91% said having an advisor who “gets” them as a person was the most important factor in their interactions.²

2. There’s a gap between what advisors think are their clients’ top concerns and what clients actually want.

The disconnect happens when advisors don’t take the time to truly understand a client’s goals and interests. A values-focused approach begins when the advisor helps clients and their families articulate what matters to them and why.

• According to EY’s 2021 global wealth research, 78% of wealth clients worldwide—and 81% to 93% of ultra-high-net-worth households— have sustainability goals, yet only about half believe their wealth manager fully understands their goals.³

When you proactively open up the lines of communication, it’s easier to ground advice in things that truly matter to your clients, and it’s easier for clients to align their wealth management decisions with their values and goals.

Tim Partridge of Altera Advisors recommends starting with simple questions to learn if there are current issues that your clients feel strongly about. These soft questions can be an on-ramp to a deeper conversation around values and how to build a values based portfolio.⁴

3. Using a values-driven discovery energizes the rest of the advising process. 

Turning ideas into action is where the best intentions often fall apart—and it’s where advisors have a chance to go above and beyond for clients.

• You’ve identified investment opportunities and weighed them against your client’s goals, risks, and fears. Now, by executing on the most appropriate options, you’re creating a real pathway to activate values.
• With this approach, financial advising is elevated from transactional to relational, where the ongoing circle of planning, execution, and evaluation, grounded in personal connection, drives recurring value for the client.

Setting the foundation for lasting client relationships

Three ways to incorporate values:

1. Reframe your conversations. Make them less transactional and more relational by asking clients what they want for themselves, their families and their communities.
2. Create opportunities to talk about your client’s values. Probe deeper into why certain goals (e.g., philanthropy), are important to them or share research on the impact of values-based investing techniques.
3. Offer talking points. Make a list of common life goals and ask your clients to prioritize them. Talk about each prioritized goal and why they are important to your client to gain a deeper level of understanding.

With a values-driven investment strategy, you’re going to come back to one thing repeatedly: Aligning what your client say with what they do. To achieve this, monitoring and reporting must go beyond financial returns to encompass any values-related impact your client intended.

Sources:

1. Morgan Stanley, “Sustainable Signals,” pg. 5.

2. Accenture, “Wealth Management Consumer Report: The New State of Advice,” 2021, pg. 21.

3. EY, “2021 EY Global Wealth Research Report,” 2021, pg. 33.

4. Partridge, T. “Advice to the Advisor – How to Talk to Your Clients About Values and Impact Investing,” 2020.

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